IBS Journal September 2015
Ferratum extends to SME lending with Mambu
Ferratum Group has launched an SME lending service using the cloud-based system of Mambu. It is live in Sweden and Finland, with a wider roll-out planned. It is one of the first recruits for Mambu in this domain but with the supplier claiming a UK SME lender recruit – Reparo Finance – of late as well.
‘We do see a lot of interest in the SME lending space,’ says Mambu’s co-founder and COO, Fredrik Pfisterer. The initial cutover was in Swe- den on 19th May and then Finland on 22nd June. Ferratum Group’s director of business lending, Scott Donnel- ly, expects to launch in at least one more western European country in Q4, perhaps also in a central Europe- an one in that timeframe, and three more western European countries in Q1 2016. Prior to this, the lending activities
of Ferratum were purely consumer-ori- ented, with a focus on unsecured. It was set up in Helsinki in 2005, oper- ates across 22 countries in Europe, North America and Asia Pacific, and recently completed an IPO on the Frankfurt Stock Exchange. Its consum- er business is mainly underpinned by in-house systems that were developed
at the outset, says Donnelly. Last year it selected Misys’ Fusionbanking core banking system but this will be used only for deposit taking and mobile services in Malta, where it has a bank- ing licence. The in-house systems were felt
to have limitations when it came to extending them for the new business lending unit, says Donnelly. It was also felt that to adapt them would have taken away resources from the con- sumer side of the business. And Fer- ratum was looking for a relatively fast launch, having decided to move into the SME sector towards the end of last year. It considered a package, recruit-
ing a contractor to build a solution, or a cloud-based system, says Donnelly. The latter approach was felt most able to allow Ferratum to meet its ambi- tious timescales and to provide the scalability needed. Aside from Mam- bu, there were a few other options, he says, but these didn’t seem as advanced. Mambu has been around since 2011, with a focus on a cloud- based delivery from the outset, with most of its customers in the microfi- nance (MFI) sector. The contract was signed in
January and there was then some delay as other logistics for the launch were worked out, including legal agreements. The implementation started in March and there was inte- gration to a few third party systems and Ferratum’s front-end. Most of the requirements were ‘out of the box’, says Donnelly, and others were han- dled by the extensibility of the Mam- bu system. Apps can be created for interfaces to external systems, such as for retrieving credit reports. Ferratum’s service has typically a
one-day turnaround on loan appli- cations, with these mainly for six to twelve months, between €2000 and €25,000, to businesses that have been operational for at least two years. Fer- ratum might expand both the length and value of the loans over time, says Donnelly. Mambu has been doing a fair
amount of development to its plat- form for SME lending recently, says Pfisterer, for aspects such as revolv- ing credit and other credit arrange- ments. The UK signing will offer this form of lending under a banking charter and is due to be announced shortly, he says.
Martin Whybrow
IN BRIEF
First Data, a US-based global payment technology company, filed for an initial public offering (IPO) eight years after American multi- national private equity firm, KKR & Co, gambled big and bought it. First Data said it planned to raise $100 million, and with the anticipated IPO revenue repay the debt. KKR bought the company in 2007 for $29.8 billion, including debt and fees. Since then it has been looking to obtain some profit
from First Data – which like many others had to battle through the recession. The leveraged buyout used more than $20 billion of loans and bonds. There was also a conveyor belt of CEOs at First Data, who all
came and went as they struggled with results and debt. The current CEO, Frank Bisignano, joined in April 2013 from JPMorgan Chase & Co. First Data is based in Atlanta, Georgia and was founded in 1971. It runs e-commerce processing services including bank and mer-
chant transactions, credit, retail and debit card issuing and processing. Since the buyout it has not seen any profit, but in 2014 it generated a revenue of $11.2 billion – an increase of 3.2 per cent from the previous year. —Antony Peyton
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© IBS Intelligence 2015
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